CSRC fires up new policies to stem market plunge

An investor wipes her nose at a stock brokerage house in Huaibei city, Anhui province, July 2, 2015.[Photo/IC]

Supportive policies

The country's securities watchdog made late-night announcements over the past week, vowing to relax margin trading rules and investigate market manipulation.

Zhang Xiaojun said on Thursday that the CSRC will examine short-selling activities for stock-index futures for suspected manipulation.

The amended rules on margin trading, whose draft were scheduled to be on public consultation till July 11, were released on Wednesday evening "in haste for special circumstances", said the securities watchdog.

According to the amendment, brokerages and margin investors can decide through discussion on when and how much percentage of additional guaranty should be put instead of compulsory sell-off.

The previous rule stipulated that investors should make additional guaranty in two trading days if the ratio of capital they borrowed from brokerages reaches the 130 percent of a warning level.

Brokerages will be able to extend contracts with their clients as long as the maximum term is under 6 months, the amendment said.

The securities watchdog also announced it will be allowing brokerages to issue bonds and explore securitization of margin trading business to widen their funding channels.

In addition, Shanghai and Shenzhen stock exchanges announced a 30 percent cut on transaction fees to boost the markets.

Fees have been cut to 0.0487 permillage from 0.0696 permillage of the transaction volume for A-share trading, with 20 percent of the charges transferred to an investor protection fund, according to a joint statement of the two bourses.

Market volatility has increased over the past weeks as investors diverge on whether A-share's year-long bull was peaked.